Microsoft Hires Former Yahoo And Google Economist Preston McAfee As Their Chief Economist

Microsoft today announced that they have hired former Yahoo and Google executive Preston McAfee as their new chief economist. Preston, was most recently director of Google strategic technologies and previously Vice President and Research Fellow at Yahoo. In his new role at Microsoft, Preston McAfee will be responsible for leading a team of economists who will work closely with Amy Hood, chief financial officer, and business and engineering groups across the company on developing new business models and metrics, designing marketplaces for advertising and apps, assisting with government relations and policy, and developing an economic strategy for the company.

Harry Shum, Executive Vice President, Technology and Research, at Microsoft commented the following on McAfee,

This isn’t the first time Preston will be a chief economist. For five years, from 2007 to 2012, Preston was chief economist and research fellow for our search partner, Yahoo!, where he captured our attention by building a great team that became well known for doing interesting research while ensuring it was impacting current products.

Susan Athey, the Economics of Technology Professor at the Stanford Graduate School of Business, and a long-time advisor to Microsoft who participated in the selection process commented the following on McAfee,

“Preston is a world-class researcher in micro-economics and marketplace design who brings to Microsoft a unique blend of research depth combined with real-world applicability. His past work has brought together economics, computer science, and engineering to create innovative solutions for problems such as the design of efficient auctions for telecommunications spectrum and display advertising. He’s also interested in applying economics and machine learning to inventing and building new tools that improve business operations and create value customers, so he brings a great skill set for the breadth of Microsoft’s products.”

Great. But this guy should have been hired 2 years ago, to ensure the economic viability of the Windows 8 app ecosystem. Also, let him take a look at the Office 2013 add-in ecosystem. When you look at add-in listings, what you see are almost all free apps, denying small software partners opportunities to make money.
App stores can either be really good or really bad. If an app store is governed by bad economics (where IP has virtually no value), then almost no one makes any money – like the Windows 8 / WP 8 app stores. If an app store is governed by good economics, then it lifts the value of virtually all apps, and is a boon to developers – like the Mac app store.